DivX to shut down online video service Stage6; "wild ride" is over

Tom, aka Spinner, ends his explanation of why DivX is shutting down its online video service Stage6 by saying, “It’s been a wild ride.”

Yes, it has, for all online video services.

DivX, a digital media company, announced today it is closing Stage6 by Thursday to focus its resources on the company’s core DivX technology/licensing business. Stage6 members cannot upload any more video to the site and only will be able to access content for three more days.

The reason given for shutting down Stage6 is obvious, something faced by all online video sites. “The continued operation of Stage6 is a very expensive enterprise that requires an enormous amount of attention and resources that we are not in a position to continue to provide,” wrote Tom, an employee of DivX, at the Stage6 blog.

While Tom did not go into detail, we can imagine what these costs are — just the bandwidth and hosting expenses had to be staggering, along with the the additional cost of policing content and avoiding potential lawsuits.

YouTube, the online video leader, is owned by search giant Google and has the scale of use and the financial wherewithal to stay afloat, even with exorbitant bandwidth and hosting costs. But it’s not immune to other costs of doing business in the online video world: Google is still being sued for $2 billion by Universal for copyright infringement.

These costs are sinking almost everybody but YouTube. Brightcove, which operated Brightcove.TV, made a similar decision in November to close its online video service to focus on its successful business-to-business division.

We can expect more closings in the coming months, or acquisitions like Revver and Maven.

A wild ride indeed.

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

3 Responses to “DivX to shut down online video service Stage6; "wild ride" is over”

They are probably being squeezed. If you take a look at the vidcast from “All Things Digital: D5” you’ll see that the corporate big-boys Networks, Web based Services Providers (Google, MS, Apple, etc.), have taken an interest in all Digital Content esp Video, even Cisco wants a piece of the action.

If there is enough support, we would like to have it. Since they are basically getting out of the industry, they should be able to provide us with all the hardware. We’ll get some people and money together and get it going again.